EBRD in €80m Eastern Europe water bet(3)

The bank has agreed to purchase a stake in Aqualia New Europe, a new company created to invest in water concessions to improve the water supply in Eastern Europe.

The EBRD has commited to invest up to €80 million of equity in Aqualia New Europe, a new company set up to buy water concessions and privately owned water businesses across Eastern Europe. The size of the bank’s equity stake has not been disclosed.

The new venture aims to help improve the quality of water supply and waste water management across the region. The majority shareholder in the project is Aqualia, a subsidiary of Spanish water group FCC.

Aqualia is already active in countries including Spain, Portugal, the Czech Republic, Italy, Algeria, Mexico and China. 26 million people in more than 1,100 municipalities currently benefit from Aqualia’s activities, according to a press release.

With the EBRD’s funding, the firm is planning to finance expansion into Slovakia, Poland, Hungary, Romania, Russia and other states of the former Soviet Union.

The investment was announced today at the EBRD’s Annual Meeting in London, where the bank identified infrastructure and energy projects as among the areas where it is focusing its effort.

The bank told delegates it was committed to “setting a rapid pace of investment, responding to the impact of the global financial crisis on Eastern Europe”. It has increased its 2009 investment target to a record €7 billion.

Infrastructure-related investments already sanctioned by the bank this year include loans totalling €350 milion to Petrom, an oil and gas company in Romania, to help pay for environmental improvements and the construction of a new gas-fuelled power plant.